CONTENTS Preface to the Fourth Edition v Preface to the First Edition ix PART ONE Introduction Chapter-1 Non-Banking Financial Companies 1.3 Introduction 1.3 RBI Act Framework 1.4 RBI NBFCs Acceptance of Public Deposits Directions1.11 RBI Non-Banking Financial (deposit Accepting/holding Companies) [NBFCs-D] Prudential Norms Directions, 20071.20 RBI Schematically Important Non-banking Financial (Non-deposit Accepting/Holding) Companies [NBFCs-ND-SIJ Prudential Norms Directions, 20071.32 NBFCs Auditors Report (RBI) Directions1.33 Asset Liability Management (AIJV1) System 1.35 Guidelines on Fair Practices Code for NBFCs 1.42 Credit Information Companies (Act) 2005 1.43 Summary 1.48 Review Questions1.52 Appendix 1-A: A Maturity Profile-Liquidity1.54 Appendix 1-B: Interest Rate Sensitivity1.58 Appendix 1-C: Statement of Structural Liquidity1.61 Appendix 1-D: Statement of Interest Rate Sensitivity1.65 Appendix 1-E: Statement of Short-Term Liquidity1.69 PART TWO Asset/Fund-based Financial Services Chapter-2Theoretical and Regulatory Framework of Leasing 2.3 Introduction2.3 Concept and Classification2.4 Significance/Advantages and Limitations2.12 Contract Act2.15 RBI NBFCs Directions2.23 Other Acts/Laws2.23 Lease Documentation and Agreement2.23 Summary2.27 Review Questions2.28 Chapter-3 Accounting/Reporting Framework and Taxation of Leasing 3.1 Introduction3.1 IAS-17 Framework3.2 AS-19: Leases3.17 Tax Aspects of Leasing3.26 Summary3.35 Review Questions3.37 Appendix 3-A: Sale and Lease-back Transactions that Result in Operating Leases3.38 Chapter-4Financial Evaluation of Leasing 4.1 Introduction4.1 Lessee's Perspective 4.1 Lessor's Viewpoint4.7 Summary4.17 Solved Problems4.18 Cases4.46 Review Questions 4.51 Chapter-5Hire-Purchase Finance and Consumer Credit 5.1 Introduction5.1 Conceptual Framework5.1 Legal Framework5.5 Taxation Aspects5.14 Accounting and Reporting5.17 Financial Evaluation5.20 Consumer Credit5.25 Summary5.29 Review Questions 5.31 Appendix 5-A: Flat Rate vs Effective Rate of Interest/Annual Percentage Rate 5.33 Appendix 5-B: Interest Rebate5.36 Chapter-6Factoring and Forfairing 6.1 Introduction6.1 Theoretical Framework6.2 Factoring in India6.16 Summary6.23 Solved Problems6.24 Cases6.26 Review Questions6.33 Chapter-7Bills Discounting 7.1 Introduction7.1 Concept7.1 Advantages7.2 Bill Market Schemes 7.4 Processing/Precaution/Defaults/Grey Areas7.7 Present Position of Bills Discounting7.10 Summary7.11 Review Questions7.12 Chapter-8Housing Finance 8.1 Introduction8.1 Housing Finance System8.3 National Housing Bank (NHB)8.5 NHB's Housing Finance Companies Directions8.18 Guidelines for Extending Equity Support to HFCs8.35 Guidelines for Extending Refinance Support to Housing Finance Companies 8.37 Refinance Scheme for HFCs8.40 Guidelines for Asset Liability Management (ALM) System in Housing Finance Companies8.46 Fair Trade Practices Code for HFCs8.53 Securitisation8.53 Mortgage-Based Securitisation8.59 Reverse Mortage Loan (RML): Operation Guidelines8.76 Securitisation of Standard Assets8.82 Summary8.82 Review Questions8.84 Chapter-9Insurance Services and Products 9.1 Introduction9.1 Insurance Ac& 19389.2 Insurance Regulator}' and Development Authority9.17 Insurance Regulatory and Development Authority (IRDA) Act, 19999.17 IRDA Regulations9.23 Insurance Products/Services9.78 Summary9.96 Review Questions9.102 Appendix 9-D: Contract between Insurer, Principal/Chief/Special Agent(s) 9.104 Chapter-10Venture Capital Financing 10.1 Introduction10.1 Theoretical Framework10.2 Indian Venture Capital Scenario10.16 Summary10.47 References10.49 Review Questions10.49 Part Three Merchant Banking and Other Fee-based/Advisory Financial Services Chapter-11Issue Management: Intermediaries 11.1 Introduction11.3 Merchant Bankers/Lead Managers11.5 Underwriters 11.12 Bankers to an Issue11.15 Brokers to the Issue11.19 Registrars to an Issue and Share Transfer Agents11.20 Debenture Trustees 11.24 Portfolio Managers11.31 Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market Regulation, 2003 11.36 Prohibition on Dealing/Communicating/Counselling on Matters Relating to Insider Trading11.41 Summary11.44 Review Questions11.48 Appendix II-A: Model Code of Conduct for Prevention of Insider Trading 11.49 Appendix 11-B: Code of Corporate Disclosure Practices for a Prevention of Insider Trading11.54 Chapter-12Issue Management: Activities/Procedures 12.1 Introduction 12.1 Eligibility Norms12.3 Pricing of Issues 12.6 Promoters' Contribution and Lock-in Requirements 12.8 Contents of Offer Document12.12 Issue of Indian Depositor)' Receipts (IDRs) 12.12 Issue Advertisement12.20 Issue of Debt Instruments12.23 Book-building12.27 Greenshoe Option12.34 Initial Public Offer Through Stock Exchange Online System (E-IPO)12.36 Issue of Capital by Designated Financial Institutions 12.38 Preferential Issues 12.42 Qualified Institutional Placement12.45 OTCEI Issues12.47 Summary12.48 Review Questions12.52 Appendix 12-D: Clarificatory Examples12.53 Appendix 12-E: Book Building-Model Time Frame12.55 Chapter-13 Issue Management: Pre-Issue and Post-Issue Obligations and Other Requirements 13.1 Introduction 13.1 Pre-Issue Obligations13.1 Post-Issue Obligations/Requirements13.7 Other Issue Requirements 13.10 Operational Guidelines13.18 Summary13.21 Review Questions13.22 Appendix 13-A: Memoradum of Understanding between the Lead Merchant Banker to the Issue and the Issuer Company13.23 Appendix 13-B: Inter Se Allocation of Responsibilities13.25 Appendix 13-C: Format of Due Diligence Certificate to be Given by Lead Merchant Banker(s) along with Draft Offer Document13.26 Appendix 13-C-A: Format of Due Diligence Certificate to be Given by the Debenture Trustee Before Opening of the Issue13.28 Appendix 13-D: Format of Due Diligence Certificate at the Time of Filing of the Offer Document with the ROC13.29 Appendix 13-E: Format for Due Diligence Certificate at the Time of Opening of the Issue13.30 Appendix 13-F: Format for Due Diligence Certificate After the Issue has been Opened but Before Closing for Subscription13.31 Appendix 13-G: Post-Issue Monitoring Reports13.32 Appendix 13-H: Format of the Report to be Submitted by the Monitoring Agency13.38 Appendix 13-1: Application Form for Issue of No Objection Certificate for Release of One Per Cent Deposit Placed with the Regional Stock Exchange (to be Submitted to the SEBI on the Issuer Company's Letter Head)13.40 Appendix 13-J: Additional Information for Renewal of Registration as Merchant Banker13.42 Appendix 13-K: Format for Half Yearly Report to be Submitted by Merchant Bankefs 13.44 Chapter-14Corporate Restructuring 14.1 Introduction14.1 Conceptual Framework14.1 Financial Framework14.5 Tax Aspects of Amalgamation, Merger and Demergers14.19 Legal and Procedural Aspects of Mergers/Amalgamations and Acquisitions/Takeovers14.23 Other Forms of Corporate Restructuring14.55 Summary14.61 References14.64 Solved Problems14.64 Cases14.79 Review Questions 14.87 Chapter-15 Stock Broking, Depositories, Custodial Services and Securities Lending Scheme 15.1 Introduction 15.1 Stock Broking15.3 Custodial Services15.14 Depositor)' System15.19 Securities Lending Scheme15.33 Summary15.36 Review Questions 15.38 Chapter-16Credit Rating 16.1 Introduction16.1 Regulatory Framework16.3 Credit Rating Agencies16.9 Rating Process and Methodology16.20 Rating Symbols/Grades16.27 Summary16.65 Review Questions16.66 Appendix 16-A: Application for Grant/Renewal of Certificate of Registration of a Rating Agency16.67 Appendix: Table A.I - A.III A.1 - A.8 Index I.1 -I.7